Why is poverty trap S-shaped curve?
When people get richer, they can afford to buy more food, which raises the level of bodily needs’ satisfaction. Thus, extra food enables raised labour productivity and increased output. This simple bodily mechanism creates an S-shaped curve between the income today and income tomorrow as depicted in Fig. 5.
What conditions might lead to an S-shaped poverty curve hint think back to the examples discussed in lecture?
What conditions might lead to an s-shaped poverty curve? Food, as a direct fueler of work capacity, might lead to an s-shaped poverty curve. Income dictates how much food an individual can buy which can directly relate to how much energy or capacity they have to work the next day.
Is it true that S-shaped curves always describe the relationship between income today and income tomorrow in developing countries?
While it is true that for a poverty trap to exist, the S-shape of the curve also needs to exist, it is not necessarily true that the S-shape curve always describes the relationship between income today and income tomorrow (or income today and work capacity, or calories consumed and income tomorrow or any other x and y …
What is meant by a poverty trap?
A “poverty trap” can be understood as a set of self-reinforcing mechanisms whereby countries start poor and remain poor: poverty begets poverty, so that current poverty is itself a direct cause of poverty in the future.
How can we represent the poverty trap graphically?
The poverty trap is seen as an “S-shaped” curve: the poor are stuck on the left side of the graph below the diagonal line, wherein future income is lower than present income, and it continues to decrease over time.
Why is Lorenz curve used?
Lorenz curves graph percentiles of the population against cumulative income or wealth of people at or below that percentile. Lorenz curves, along with their derivative statistics, are widely used to measure inequality across a population.
What is the nutrition based poverty trap?
The concept of nutrition-based poverty trap stresses that with earning a little extra amount of money, the person spends the surplus adding more calories in his diet, With more calorie intake, the person enjoys a better life in terms of health and subsequently starts engaging in more labor work.
What is an example of a poverty trap?
In the United States, cities like Detroit are good examples of how poverty can turn into a poverty trap. When Detroit lost manufacturing jobs, people with resources moved out of the city, leaving behind poor neighborhoods. More businesses closed, public services experienced cutbacks, and poverty increased.
How do poverty traps occur?
A poverty trap is created when an economic system requires a significant amount of capital to escape poverty. When individuals lack this capital, they may also find it difficult to acquire it, creating a self-reinforcing cycle of poverty.
How is Lorenz curve used to measure the poverty?
The Lorenz curve shows the cumulative share of income from different sections of the population. If there was perfect equality – if everyone had the same salary – the poorest 20% of the population would gain 20% of the total income. The poorest 60% of the population would get 60% of the income.
Which curve measures relative poverty?
What is poverty trap PDF?
A poverty trap is a self-perpetuating condition, in which an economy suffers from. persistent underdevelopment, vicious circle of poverty, created by circular causation. due to the presence of some external economies and/or strategic complementarities.
What do Banerjee and Duflo mean when they say that health is a low hanging fruit?
By “low hanging fruit” the author Abhijit Banerjee definitively means to say: measures that are very effective at preventing many common health problems and are often quite affordable.
How does poverty affect family structure?
The Impact of Children in Poverty Within The Family Living in poverty often means having limited access to health care, food and housing security, greater risk of school drop-out for children, homeless, unemployment due to lack of education or child care and, unfortunately, not reaching one’s full potential.
What are the types of poverty traps?
There are two types of poverty traps: technologically-induced poverty traps and demographically-induced poverty traps. We shall consider each of them separately. Both cases involve the inclusion of a non-linearity into the system.